British Gas Owner Centrica Profits From Cold Snap
LONDON -- Centrica released a positive interim management statement this morning, with the shares responding accordingly by gaining 4 pence in early trade to reach 381 pence.
While we've seen updates from the likes of high-street retailers suffering due to Britain's extended cold weather recently, it's no surprise that energy companies will have gained from their customers spending more time at home and cranking up the heating.
The owner of British Gas reported that the average residential gas consumption was 18% higher in the first four months of 2013 than its 2012 comparative period, while average residential electricity consumption was 3% higher. Its residential energy supply business also saw the number of accounts increase by 28,000 over the period.
But management is taking the unusual step, albeit a welcome one for its customers, to use the increased profits "to continue to invest in customer service and price competitiveness" -- in other words, to keep its prices down rather than use the profits as an excuse for a price hike, after recognising the "economic pressures" facing many of its customers.
In other news, full-year earnings growth is expected to be in line with market expectations, while Centrica also confirmed that its "refreshed strategic priorities" are making good progress, following a North American LNG export agreement with Cheniere in March and the acquisition of Canadian natural gas assets from Suncor in partnership with Qatar Petroleum International in April.
Of course, whether today's results and the future prospects for the industry all combine to make shares of Centrica a 'buy' remains your decision.
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